Disposable incomes have broadly stagnated over the last decade

“There’s an absolute fact out there, which is that ordinary working people have suffered a collapse in their disposable income over the last 15 years.”

Chris Bryant MP, 17 November 2016

It’s not clear what Mr Bryant is referring to here, and we’ve asked him for the source.

Over the last 15 years, disposable incomes have risen across all income groups. Over the last decade, there’s been stagnation, but “collapse” is a stretch if that’s what’s being referred to.

Disposable income is what households bring in after deducting certain taxes, like income tax.

Official figures tell you a lot about the ‘average’ household over time and give some breakdowns, for example splitting everyone into groups from richest to poorest. But there’s no handy definition for ‘ordinary working people’.

In general, disposable incomes in the UK rose from the mid 1990s till the mid-2000s, and have broadly stagnated since.

As the Bank of England’s chief economist put it a few months ago: “Half of all UK households have seen no material recovery in their real disposable incomes since around 2005.”

The Bank’s own calculations show the trend since the recession in the late noughties. Disposable incomes are not far from where they were for the highest and lowest earning households now compared to before the downturn. In fact, the poorest fifth of households fared better than the richest during the downturn, on this measure.

Stagnating incomes arguably mean years of lost earnings for a lot of people, compared to what ‘could have been’ if the trends in the early noughties had held. But if that is the argument, 15 years looks like the wrong timeframe to be using.